Help Re Debt Consolidation

A question about : Help Re Debt Consolidation

Morning Dudes

Im currently looking into consolidating my car loan and 2 credit cards.

My car loan has a settlement figure just now of Ј3900

im currently paying it back at Ј104 a month over 5 years, im about a year into it. I believe the rate is 5.5%

i have 2 0% credit cards

sainsburys - Ј2300
Cap 1 - Ј500

Both cards are at their limit just now and im only paying the minimum.

Now I know you may think im daft wanting to put 2 0% cards onto a loan but i really think it would help me just to have one payment coming out a month.

I also have my car insuance due next month this will be Ј1000 for the year. I cant afford it so would like to put that on the loan as well so I can get everything sorted and start off fresh so to speak.

any advice would be much appreciated.

Best answers:

• You seem to be panicking because your car insurance is due and you have no money to pay it, rather than because you have some debts? Can you not afford to pay your insurance monthly rather than in one lump sum? If you can't afford to at least cover the running costs of the car then it would seem you are overstretched in other areas and a loan is not going to be the answer. What happens next year when your car insurance (or any other large bill) is due....another loan?
  My advice would be the same as Debt_Free_Chicks, to sit down and do a proper budget. Work out where you can cut back and then use that money to pay off your debts after all your expenses are covered (including the car insurance!). You don't need two credit cards so pay off the Capital One card and close it. Then work on the other credit card. The car loan is at a good rate so dont worry about it. Good luck!
• There is only one situation I can think of where your idea makes any sense, and that is if you regularly incur bank charges for missed payments. Reducing the number of failed payments would reduce your charges, since one mistake can easily rack up Ј100 plus of charges (for say three missed payments), this might out weigh the additional interest costs if you consolidate. However, a higher level off awareness of your current account balance would be by far the better option.